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- Author or Editor: Robin G. Brumfield x
Since World War II, U.S. agriculture has reduced production costs by substituting petrochemicals for labor, often resulting in overuse of agricultural chemicals. Among the adverse results of chemical overuse are increases in certain pests, groundwater and surface water contamination, and surface water run-off. There is a growing perception that consumers bear the risk of pesticide use and farmers reap the profits. For farmers, the short-term risk of losing a crop that is already planted may take precedence over the long-term risks of such things as the pests developing resistance to pesticide, environmental damage, and applicator health risks. Alternative farming programs such as ICM and organic farming allow farmers to reconcile short-term risks and long-term benefits. Before farmers adopt an alternative system, they must be convinced that economic benefits from the alternative farming program surpass the costs incurred. Few studies have compared the cost of producing organic produce vs. using conventional production systems. One study found that net returns were slightly higher in ICM and organic systems that conventional ones. This is because of lower costs when using ICM systems and price premiums for organic crops. These results suggest that there may not be any trade-off between economic efficiency and environmentally friendly farming practices. If the society desires better environmental quality, it will be ready to pay premium price for the organic or ICM-grown vegetables. In a free-market system, farmers will use the market signals in the form of price, and they will produce accordingly.
The computer program Greenhouse Cost Accounting, available for DOS-based microcomputers and Macintosh computers, is described. The software enables the user to perform cost accounting and to determine the profitability of greenhouse crops. The information can be used by managers to analyze various production, financial, and marketing strategies. The Greenhouse Cost Accounting program uses cost information typically found on income statements and direct cost information for each crop. From these inputs, the program allocates as many costs as possible to individual crops. The remaining unallocated costs are assigned to each crop on a per square-foot-week basis. The computer output provides information on costs and returns on a per crop, per unit, and per square-foot basis. It also provides an income statement showing total costs, allocated costs, and unallocated costs. The output can aid the manager in making decisions about pricing, reducing unprofitable production, controlling costs, and increasing sales of profitable crops. The program also can be used by greenhouse management classes or for extension workshops.
The environmental horticulture industry (sometimes referred to as the “green industry”) is usually divided into nursery and floriculture crops. The green industry in the northeastern United States is an important component of agricultural production, with over $2 billion in farm cash receipts, equating to 22.4% of all farm cash receipts in the northeastern United States. It is the number one agricultural commodity in five northeastern U.S. states. Competition in the green industry has become fierce. Many factors have put downward pressure on price. These include the recent volatility of fossil fuels and general energy prices, domestic competition, off-shore production, a weakened and stressed economy, and the growth of the mass market. Nationally, the number of producers continues to decline as a direct result of the newly defined economic risks. The industry's profit margins are typically low, leaving little room for growers to absorb significant increases in costs or decreases in revenues. Unlike farmers who produce field crops, nursery and greenhouse firms bear the entire price, market, and production risks because these crops have had no government support programs. This article will discuss what strategies producers in the northeastern United States are using to reduce costs and increase profits in tough economic times. It will analyze how producers have they honed their marketing and management skills to continue to survive and respond to current trends.
Since World War II, U.S. agriculture has reduced production costs by substituting petrochemicals for labor. Adverse impacts from chemical intensive agriculture include increased pest levels, groundwater and surface water contamination, soil erosion, and concerns about harmful levels of pesticide residues. Sustainable farming programs such as integrated crop management (ICM) and organic farming encourage farmers to use systems that reduce the adverse impacts of chemical agriculture. However, before farmers adopt an alternative system, they must determine that economic benefits from the alternative farming activities exceed the costs incurred. Unfortunately, relatively few studies have compared the cost of organic crop production with conventional production systems. Results of these studies are mixed. In some studies, organic systems are more profitable than conventional systems with organic price premiums, but are not economically viable without price premiums. In one long-term study, the organic system was more profitable than a conventional one if the cost of family labor was ignored, but less profitable if it was included. In some studies, net returns were higher for ICM than for conventional or organic systems, but in others, they were higher. Results also vary on a crop by crop basis.
We surveyed 22 Australian nurseries in 1995 to: 1) develop a profile of Australian nurseries from a production, management, and profitability perspective; 2) compare the data to relevant U.S. benchmarks; and 3) identify trends and potential areas of improvement in the management of Australian nursery enterprises. The study confirmed that Australian nurseries incur high labor costs (38.8% of sales) that are comparable to United States nurseries, while costs of materials and supplies were lower than their U.S. counterparts. Overall, the costs of the surveyed nurseries appeared lower than their U.S. counterparts. Concerns of managers were directed towards recruiting and keeping labor and marketing rather than increasing capital investment to increase production efficiency. Capital expenditures tended to be funded from internal cash flows rather than external borrowings. Many of the nursery managers used relatively simple performance indicators and most business objectives were stated in general terms. Australian nurseries carried more diverse product ranges than the U.S. nurseries. Many of the nurseries adopted quite vigorous marketing strategies with a stronger emphasis on marketing than in those in the U.S. Concerns about the viability of the industry included oversupply, the growth in chain stores business, factors eroding the demand for nursery products and greater regulation.
The aim of this study was to identify existing gender roles in greenhouse vegetable production in the Antalya Province of Turkey. For this purpose, we conducted face-to-face interviews with the owners of 50 vegetable-producing greenhouses to understand the dominant household structures, activity profiles, information sources, training needs, access to resources, control over resources, and intrahousehold income stream. Activity profiles reflected the hours per day men and women spent on specific greenhouse production and household tasks. We observed access to and control of production resources as well as intrahousehold income streams for the two genders. Compared with men, women had higher illiteracy rates and lower levels of education. They also had overall heavier workloads despite having similar workloads in the greenhouse (productive activities), the difference resulting from household (reproductive activities) which were carried out mainly by women. Women received most agricultural information from neighbors, while men obtained most information from chemical salespeople. Notably, men received some information from the agricultural extension service, but women did not. Women also had less access to and control over productive resources. Furthermore, the intrahousehold income streams in the selected households benefited men more than women. In this study, we compared differences among three independent demographic variables: the age of producers, the level of education of the producers, and years of experience farming against women’s ability to prepare the family budget, spend money without asking her spouse, purchase of agricultural inputs, and select which vegetables to produce. Statistically significant links were found between women’s age and ability to manage the family budget, education level and ability to make purchase decisions, and years of production experience and ability to select which vegetables to purchase. The results of this study provide evidence for an unequal social structure and show that efforts should be made to increase women’s access to and control of production resources, including information from the extension service.
The development of New Zealand's economy was based largely on exports to England. With the formation of the EEC, New Zealand was forced to find other markets and concentrate on a wider variety of export commodities. Marketing boards for specific products with monopoly power have been at the center of agricultural and horticultural exports in New Zealand. New Zealand has concentrated on developing new varieties, premium quality, research on postharvest handling, branding, and other marketing procedures to compete in the world market and give producers a good return.
Turkish cut-flower exports grew from about $100,000 in 1985 to $11 million in 1995 (not adjusted for inflation). Since this is a growing industry in Turkey, we wanted to examine the production structure and main problems of export-oriented contract growers. We surveyed 33 cut-flower export growers and 30 contract growers between May and July 1997. We conducted the survey in the Antalya province, which is the center of the export-oriented cut-flower production in Turkey. The results indicate that cut-flower companies were not highly mechanized, but did use computerized accounting systems. Transportation of cut flowers to foreign markets was the largest expense item in the cut-flower industry. Despite a high rate of unemployment, cut-flower companies face difficulties in obtaining and keeping qualified employees. Managers tended not to use specific performance indicators such as sales per employee or sales per square foot relevant to the cut-flower industry. The most common method for arranging cut-flower export sales was personal contact with the importers. Contracts between firms which grew and exported flowers and smaller contract growers were common, but some problems existed concerning quality and financial obligations. Growers are using fewer commission contracts and are instead opting to sell on a fixed-price basis. The main concerns raised by managers were related to increased competition, price-cutting, transportation expenses for export, training, and labor supply.
The greenhouse, nursery, and sod (GNS) sector in the United States accounted for $10 billion in gross sales or 5% of gross farm receipts, in 1998. Despite its significant economic contributions, the sector receives little attention from policymakers. Part of the problem lies in the absence of empirical economic analysis that addresses the impact of the sector on the U.S. economy. The absence of such analysis places the sector at a disadvantage when agricultural policies are designed to address agricultural imbalances, such as farm income problems, and hinders the ability of the sector to lobby for policies favorable to GNS producers. This study provides estimates of the economic impacts of the GNS sector on the U.S. economy and quantifies the linkages between the GNS sector and other economic sectors. The results show that the sector contributed over $26 billion and $17 billion in output and value added economic activity, respectively, and over 438,000 jobs.